Watchdog groups such as the Electronic Frontier Foundation (EFF) are in the business of sounding alarms whenever technology threatens to impinge on individual privacy. Judging from the hubbub they create, privacy advocates would have us think that all consumers are naive dupes who unwittingly invite the unscrupulous to compromise their credit ratings or steal their identities.
For their part, however, many consumers don't seem overly concerned about divulging personal details. People will compromise their privacy in return for a price -- just tune into the Jerry Springer Show. A more wholesome example of this quid pro quo philosophy occurred this past February when a Pasadena, Calif., startup called Free-PC.com offered consumers a new desktop machine gratis in exchange for their agreeing to reveal personal information, including income, interests and spending patterns.
Hoping to find 10,000 people willing to strike the bargain, Free-PC.com was swamped by 500,000 volunteers within four days of making the offer. In return for a PC and free e-mail and Internet access, consumers accept targeted advertisements constantly displayed on their screens. Free-PC.com makes its money by charging advertisers for delivering ads to an audience that meets its profile requirements. Not content to simply post their marketing pitches, the advertisers enjoy the added privilege of keeping tabs on where consumers surf and what they buy online.
For its part, Free-PC.com doesn't reveal the names of the consumers to advertisers. Instead, users are identified by an ID number. Predictably, privacy advocates cried foul claiming that advertisers barely need to break a sweat to identify users. All they have to do is match the ID number with the billing information a consumer hands over when they make a purchase online.
While that may be true, consumers don't seem to care much. On the contrary, existing Free-PC.com consumers might divulge more information if offered additional hardware such as a free printer or a handheld computer. Soon a brand-new PC wonít be good enough to snag the most desirable consumers.
For years, consumers have forked over personal data often for little, if any, remuneration. Frequent flyers part with demographic and economic data for an aisle seat and an extra bag of peanuts. People who return product warranty cards give up information and donít even get a bag of peanuts. As people wise up to the value of their own information, theyíll start demanding something in return. I don't participate in telephone surveys anymore unless I get something above and beyond the feeling that someone cares what I have to say about radio stations or political candidates. On the other hand, I religiously whip out my frequent shopper card at the supermarket. Iím more than happy to share my grocery list with the world if it means saving 35 cents on my favorite brand of yogurt.
As the value of personal information goes up, privacy advocates and direct marketers will continue to bang heads with legislators ready to add their two bits to the fray. For companies that want to remain on good terms with their consumers, itís time to view collecting market information as a two-way process. If they want detailed data, they should think about how much itís worth -- and compensate their consumers accordingly.
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